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a disease that has been curable and preventable for about 40 years, the number of cases actually increased. We are seeing an increased number of measles outbreaks and deaths from measles. Now we have the year 2000 health objectives, setting forth a fairly comprehensive set of goals for improving the health of Americans by the turn of the century.

Has the Department developed a comprehensive plan laying out for each objective which changes in Federal programs or increases in Federal funding should be made so that we can achieve in the year 2000 what we did not achieve in 1990? You have got the goals out there. Are you looking at the specific Federal programs saying these have to be increased, these have to be emphasized to achieve those goals?

Secretary SULLIVAN. Senator Harkin, the goals for 1990, which were established in 1980, involved 280 hard objectives as health goals for the Nation. We reached about one-half of those goals.

This was the first time we set goals for the Nation. About onequarter of the goals we did not reach, infant mortality being one, but the experience that we gained from this prior iteration has been very helpful to us in developing the goals for the year 2000.

These goals we refer to as national goals. They are goals which call for not only the Federal Government but State and local governments, the private sector, individuals themselves, philanthropic organizations, et cetera, to participate. We will not reach these goals with the Federal Government acting alone.

We feel very confident that the goals we have established for the year 2000-some 298 goals in 22 priority areas-are realistic. They can be reached. The experience that we gained from the prior effort will be very helpful. They include such things as bringing infant mortality down to 7 infant deaths per 1,000 live births. We know we can reach that.

Japan is already at six. At the end of World War II, Japan had an infant mortality rate much higher than ours, but they made the concerted effort, and they have been successful.

Another goal is to reduce the incidence of smoking to less than 15 percent of our population. Right now it is around 27 or 28 percent. Again, we feel that we can reach that goal, but we have to do a number of things to reach it.

We are focusing more funds on prevention, as well as trying to mobilize our citizens to understand the power that they have to influence their own health futures. By that I refer to the fact that the Public Health Service estimates that we could reduce by onethird all causes of acute disability and by two-thirds all causes of chronic disability by changing health behavior involved in the top 10 causes of death and disability in our society.

I feel optimistic that we will reach those goals. There are specific timetables. Our Assistant Secretary, Dr. Mason, can fill you in in more detail than I. He meets every 2 weeks, and goes over several of those objectives with members of his staff and others. During the course of a year all 298 objectives are reviewed in terms of the progress that has been made toward them, any problems, and the resources and organization required.

We feel optimistic and are pushing, because that has to be a central part of our efforts to improve the health of our citizens, as well as to control costs of a health care system.


Senator HARKIN. Well, I hope that you might work with us here we both have the same objectives-and see what we can do to assist and help in any way in terms of providing the emphasis in those areas. The health objectives really focus us toward prevention and health promotion by the year 2000.

Secretary SULLIVAN. We welcome cooperation with you, and look forward to working with you.

Senator HARKIN. If you have those, you can either submit them or just send them up, or ask Dr. Mason to work with our staff on whatever we can do to start planning ahead for next year, even, to start meeting some of those, whatever they might be.

Secretary SULLIVAN. Mr. Chairman, one other thing about the "Healthy People 2000" report is that it represents the first time, to my knowledge, that any nation has had a comprehensive series of health objectives.

I have alluded to these objectives at meetings with ministers of health from other countries. At the World Summit for Children last September I distributed goals for the health of children along with the educational goals that came out of the educational summit the President had with the Governors.

That has attracted a lot of interest from other nations who are now looking at this process and are developing their own variations. We will be happy to report to you in more detail as to how that program is working.

[The information follows:]


Consistent with the concepts that Healthy People 2000 represents a set of national, and not just Federal, goals and objectives, and that their achievement will require efforts by not only the Federal government, but also by State and local governments, the private sector, community and non-profit organizations, and by individuals themselves, it is not feasible to develop one comprehensive implementation plan. Instead, each of these actors is developing its own plans that address its share of responsibility required to ensure that these goals and objectives are met by the year 2000. The Department is leading this process by designing its own plans and by offering to provide technical assistance to others as they draw up their own. The Public Health Service (PHS), for example, is currently developing its own implementation plans covering each of the 22 priority areas for each of its constituent agencies. PHS expects to have completed this document some time this fall, and we should be able to share it with you once it is published.

However, it is also important to note that we have not waited for more plans to be developed to begin our implementation efforts. In formulating the budget request now before you, we were very cognizant of the Healthy People 2000 goals and objectives. I know that the unprecedented emphasis and budget increases for preventive activities in the 1992 President's budget are a reflection of this concern. The strategies cited in Healthy People 2000 have helped guide our selection of priorities for the 1992 budget request, and thus our resources are proposed to be focused on expanding proven prevention services targeted to childhood and other health problems particularly affecting the poor and disadvantaged; and improving the ability of Federal, State, and local governments to understand and respond to such health problems. This is demonstrated by the significant budget increases requested in 1992 in numerous prevention areas, such as infant mortality reduction, childhood immunization, breast and cervical cancer screenings, lead poisoning prevention, injury con

trol, smoking cessation, food and drug safety, substance abuse prevention, and other prevention-related biomedical and behavioral research.


Senator HARKIN. I appreciate that.

Last, and this will be the last one, I just want to cover an issue that keeps coming up and keeps bubbling to the surface, and it is something that has to be addressed. I do not know exactly how, but it has got to be addressed.

Your 1992 request for NIH includes $1.9 billion for indirect costs associated with the grant awards that NIH expects to make next year. The indirect cost rates range from 6.3 percent for the foundation at the New Jersey Institute of Technology to 155 percent for the Michigan Cancer Foundation.

You know indirect cost rates vary for a number of reasons. According to a study done by the inspector general in 1987, one of the reasons for indirect cost rate variance is the space used by facilities.

For example, in 1987, the University of California at San Francisco and the University of Washington had very comparable amounts of NIH research work. However, one university devoted 1,178,000 square feet to that research. The other devoted only 531,000 square feet to the research they did. The cost of the space in both cases was reimbursed through the indirect cost payment program.

I know you are aware of the problems that have been reported at Stanford University, where the cost of the university's yacht and flowers for the president's home have been charged to indirect


Mr. Secretary, as you know, the Appropriations subcommittee for the Department of Agriculture, which is chaired by Senator Burdick, and I sit on that, imposed a 25-percent indirect cost rate cap in fiscal year 1990, and in 1991 that cap was reduced to 14 percent. So I guess I am basically saying that we have got a problem out there, and could you-if not now, perhaps could you submit to us later on some suggestions for solving this?

Last, should we consider putting a cap on it, just as we did in agriculture?

Secretary SULLIVAN. Thank you, Mr. Chairman. I would like to get a more detailed response back to you.

[The information follows:]


Indirect costs are designed to reimburse grantees for legitimate, real costs of conducting research-utilities, administrative support, equipment and facilities maintenance. While an indirect cost cap may serve to reduce the costs of research in the short-term, an unreasonably low cap will also undermine seriously the ability of many institutions to conduct government-sponsored research. I also might add that the NIH's "market share" of research grants to universities across the country is considerably larger than that of the Department of Agriculture-more than forty times larger-consequently the affect of a cap on NIH indirect cost payments would be magnified considerably.

A cap is not the only way to contain or reduce indirect costs, and until we look at all the options available to us, I am unable to say yes or no. I do know that the new Director of the National Institutes of Health, Dr. Bernadine Healy, shares my view that we must assure that each of our research dollars is spent well, and that she has stated an interest in participating in the review of indirect costs.


Secretary SULLIVAN. I think that Stanford itself has indicated that they were in error with the charges for this yacht, and I believe they have withdrawn that request.

Senator HARKIN. Excuse me, I just wondered-you know, again, we want to cultivate a culture of character in our society. I just wonder if the individual responsible for listing that yacht as indirect costs got canned.

Secretary SULLIVAN. I do not know, Mr. Chairman.

Senator HARKIN. I would sure like to find out. Would you help me find out? [Laughter.]

Secretary SULLIVAN. This is a process that is still under review, but one of the things in the way these agreements are made is the question of which Federal agency has the lead for negotiating indirect costs. For Stanford it was the Office of Naval Research, and I think that is an issue that perhaps we want to review.

It was not individuals with HHS who negotiated those indirect costs rates in that case.

The issue of indirect costs certainly merits review and monitoring, because these are taxpayer dollars. They are very signifi


At the same time, I would be worried about establishing an arbitrary cap. We have built in this country over the last 50 years, a biomedical research enterprise that is the envy of all other nations. There is no question about the creativity and the innovations of our biomedical research enterprise. Note the number of Nobel Prizes awarded in the last 20 or 30 years. We have gotten an inordinate share of those.

Part of that has been because of the support that we have given for biomedical research, and part of that is the indirect cost rate, the purpose of which is to reimburse the universities or other institutions for the costs of doing the research.

The judgment was made by the Congress back in the 1940's and 1950's that this represented an investment in the Nation's interest, and the universities contribute to the Nation's interest by carrying out their research.

We all benefit from the research that is carried out. If we were to impose an arbitrary cap, that might very readily increase the cost of research to the universities so much that we would end up eliminating or decreasing the amount of work that is done. We want to do everything we can to foster the research.

One of the other reasons for the tremendous disparity in indirect costs is that on training grants the indirect cost rates are very low because the cost of administering a grant like that, involving personnel support, is low.

When you have biomedical research, the cost of laboratories, the cost of equipment of all of the utilities, et cetera, gets to be much greater. It also takes into account that in a city like San Francisco, space is much more expensive than in Seattle or elsewhere. We try to take those things into account.

Having said all of that, I come back to my original point. I think that these costs need to be reviewed carefully to be sure that they

are appropriate and that we are getting value for our dollars, but I also believe that, overall, it has worked very well so far.

When I was a medical student, I treated patients with paralytic polio. At the same time, back in the mid-1950's, that I was doing that in Boston, Thomas Endes had a grant from NIH for around $150,000 which he used to learn how to grow this virus in the laboratory on slices of monkey kidney tissue. That brings in another thing, the animal research issue, and is one of the reasons I have been outspoken against those who are arguing against animal research.

Because of that investment of $150,000, where we learned how to grow this virus which was then used to make a vaccine by killing the virus, or altering it, last year in the United States we had no reported cases of paralytic polio. We still have some cases around the world, but we are now talking tentatively, but I think very definitely, about possibly eradicating polio from the world. This is a disease that cost us hundreds of thousands of dollars and changed the lives of people who were infected by it.

That is just one example of the benefit of research-dollars saved, lives preserved. People are able to continue to be independent, productive citizens, as opposed to being in an iron lung or in a wheelchair, undergoing tendon transplants attempting to retain some mobility.

As we look at this issue, we should try to make adjustments in ways that do not compromise our biomedical research effort, because it has been so productive over the years.


Senator HARKIN. I appreciate that, and I have used that example myself in the past, but there is a problem out there and it has got to be looked at, and just because we both support biomedical research-and I happen to be one of the strongest supporters of NIH and what they are doing. I think my record shows that-that does not mean that we can say well, whatever the indirect costs are we will pick up the tab.

We have got to have some accounting principles in there. We have got to find out how we can perhaps reduce this increase. $1.9 billion is quite a bit for indirect costs, and staff just informed me that a 1-percent reduction of the average would save $30 millionjust 1 percent. What is the average? Forty-seven percent. It could be a lot of money we could save.

So again, when we are looking at places to save money, and we are looking at maternal and child health care programs and things like that, I think maybe there is something here that we have got to take a look at. But you are right, we have to be careful, because we cannot shut off the biomedical research.

Well, you have been very generous with your time. We really appreciate your being here. It was a good session, and as I said, hopefully not confrontational at all but trying to answer these questions in the best way that we can achieve the goals that we both want to see.

So again, Mr. Secretary, thank you. We look forward to working with you this year on a whole broad range of issues, and perhaps we can start the process toward meeting those health objectives in

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